Auction Service Site Andale Gets $41 Mln From Bowman-Led Group

Mountain View, California, April 10 (Bloomberg) – Andale Inc., a one-year-old company that helps small businesses auction new and used goods on Web sites such as eBay Inc., said it raised $41 million from investors led by Bowman Capital Management.

Terms weren't disclosed. Other investors include Tarrant Venture Partners, a fund sponsored by the principals of financier David Bonderman's buyout firm, Texas Pacific Group. Andale's existing investors – including Silicon Valley venture capital firms Accel Partners and Mohr, Davidow Ventures, and Oak Hill Venture Partners, an affiliate of Texas investor Robert Bass – increased their investments in the company.

The financing is Andale's second, after raising $19.6 million in October. Munjal Shah, chief executive and co-founder, said the company plans to use the proceeds for product development, marketing and partnerships.

For fees of about 3 percent of a transaction, Andale lists sellers' goods on online auction sites such as eBay, Amazon.com Inc., Yahoo! Inc., and BigVine.com. It also handles tasks such as billing, tracking inventory and calculating taxes. Andale began charging for its services this month.

Antiques and Collectibles

"The transaction-based business model is an oasis of profitability on the Internet," said Shah. He said user surveys show Andale's small business sellers are making gross margins of more than 40 percent auctioning goods online.

Antiques and collectibles are two of the hottest areas for auctions, Shah said. The range of goods includes computer equipment, electronics equipment, condominiums, sporting goods, and discontinued items.

Since Andale introduced its auction-management service in November, the number of customers and transaction volume have more than doubled per week, Shah said. The company currently estimates there are thousands of sellers using its site. Andale has about 100 employees.

The company also said David Hayden, founder and chairman of Critical Path Inc., joined Andale's board. Stephanie Schwartz, formerly with Informix Corp., was named vice president of finance and administration; Sharon Knight, who previously led customer service for Microsoft Corp.'s WebTV division, was named vice president of customer service, and Tom Todaro was named chief strategy officer.

Todaro previously was the founder and vice president of corporate development for Hardware.com, a home improvement Web site.

– Hui-yong Yu in Seattle (206) 521-5976, or email at: hyu@bloomberg.net through the San Francisco newsroom (415) 912- 2980/shw